Cryptocurrency

The easiest way for me to understand Bitcoin was to think of it as a super sophisticated random number generator. Go to this website and see what I mean: https://www.bitaddress.org/

When you click “generate new address” you are creating a Bitcoin wallet. A Bitcoin wallet is essentially a Bitcoin bank account. That address on the left that says “share” is your public address. You use it to deposit bitcoins into your wallet, or check the balance of your wallet. You can give that address to anyone or post it anywhere.

The other one on the right that says “secret” is your private key. You will only use that to withdraw Bitcoins from your wallet. You want to keep that hidden and never show anyone.

You can click “bulk wallet” to generate multiple wallets at once.

This program can, and should, be run offline when you intend to print and save that information. You can download the program by clicking the link at the bottom of the page, it will take you here: https://github.com/pointbiz/bitaddress.org

If you plan on using the information generated by that program, you should generate the wallets offline for greater security. I personally bought a cheap 70$ computer from Walmart and use it solely for generating and printing wallets for cryptocurrency. However, there are popular devices that are much safer and more effective for generating Bitcoin wallets. I have yet to use them, but two popular names in the industry are Trezor and Ledger.

A common question is: “can't I just create a bunch of wallets and wait for people to fund them?”
Answer: No. Imagine one grain of sand represents one bitcoin wallet address. Now imagine all the sand on the beach. Now imagine all the sand on every beach on the planet. Now imagine that every grain of sand is its own planet with equally as much sand. All those grains of sand would still not even be 1% of the possible bitcoin addresses.

Another common question: If I made this wallet offline how does Bitcoin know about the address?
Answer: It doesn't, it just recognizes the algorithm. It knows that address is valid because, while the numbers may look random, there is some kind of format to it. So it just sends the coins, it doesn't care if you made that address offline, online, in a box, or with a fox, it just sends the coins.

You have to understand that the coins aren't really on that piece of paper you just printed, they're on the Blockchain. The coins are always going to be on the Blockchain and all you can do is move them around.

What the hell is the Blockchain you ask? The Blockchain is the totally transparent ledger that keeps track of all the Bitcoin transactions that have ever taken place. The most popular host of the blockchain is blockchain.info, and if you go here:https://blockchain.info/unconfirmed-transactions you can scroll down and see all the of the Bitcoin transactions currently taking place. Impressive isn't it! Now you can click any of those transactions and see where those Bitcoins are going, and where they came from. However you have no idea who those addresses belong to. So even though it's completely transparent, it's also completely private.

You can paste your public addresses into the Blockchain.info search box to check the balance of your wallet!

The Blockchain is monitored and updated by people called miners. Anyone can be a miner, all you have to do is download the program and begin using your computer's processing power to help secure the network. However, Bitcoin has gotten incredibly popular, so if you want to mine Bitcoin, you're going to need a bunch of super computers to compete.

The miners secure the network and update the ledger, and for their hard work, they are rewarded with Bitcoins! However, rewards get smaller and smaller until eventually all 20 million Bitcoins are mined.

There are thousands of different cryptocurrencies, all with different attributes, but this is just a basic tutorial. All of these cryptocurrencies are open source, meaning everyone is invited to look at the code and make sure it is not malicious. I'm certainly not a computer wiz, but if Provident Metals is willing to trade you gold for it, I imagine some people over there probably reviewed the code once or twice.

If you want to trade USD for bitcoin, I use coinbase, but there are plenty of places that will do it. There is probably even a Bitcoin ATM near you! https://coinatmradar.com/

To spend your bitcoins you will need to use an online wallet or a hardware wallet like the ones mentioned above, but this is incredibly simple once you understand the basics. Plus if you're a long term holder, you won't need to do this for a while.

In addition, it's not a ponzi scheme like the Federal Reserve system. Bitcoin is totally transparent. Unlike the Fed that stopped printing the M3 money supply back in 2006. The Fed literally creates as much currency as it wants, gives it to whoever it wants, and doesn't have to tell you a thing about it, all while maintaining a monopoly on currency creation.

If you have any questions about Bitcoin or other cryptocurrencies, these are good places to start: